As government moves to amend the Mining Act and its attendant regulations, Karamoja sub region is demanding for an increase in the royalties, so that the people there can adequately benefit from the region’s mineral wealth.
When it comes to the availability of social services, Karamoja is one of the poorest regions in the country where basic services like clean water are lacking in a wide area. However, what the region lacks above ground is made up for beneath it, with a number of lucrative minerals such as gold, limestone and marble.
It is as a result of this mineral wealth that leaders from the area want the formula of sharing royalties overhauled. Under the current Mining Act of 2003, the central government takes 80 per cent of the net total royalties, a district where the mineral is mined takes 10 per cent, while the sub counties and the owner take 7 per cent and three percent respectively.
But through their leaders and Civil Society Organizations (CSOs), the people of Karamoja propose that the land owner’s share of the royalties should be increased to 10 percent, Sub County’s share to 20 percent while a district and central government should get 15 and 55 percent respectively, as a justification for the impact of mining on people livelihoods.
This is based on the fact that mining takes a lot from their livelihood. For instance, huge chunks off land are condoned off for mining activities meaning that people lose their grazing land to mining companies. Cattle-keeping is one of the main social fabrics of Karamoja.
The proposals were presented to a national conference on mineral policy, law and taxation review meeting held at Golf Course Hotel Kampala on Friday last week. The conference was organized by Ecological Christian Organization and Action Aid Uganda. The proposals from Karamoja followed a series conferences convened by CSOs in Karamoja.
Another sticky issue the people of Karamoja think should be review is non-payment or delayed payment of royalties. John Robert Jaka, the chairman of Rupa sub-county in Moroto district, which is part of Karamoja, complained that although the law provides for payment of royalties, the money is rarely received. “Companies have been mining but we don’t see money. Sometimes when they [companies] decide to pay, it is too little compared to what they have taken,” he said.
Gabriel Data, a senior geologist in the Department of Geological Survey and Mines, in the ministry of Energy and Mineral Development, said government has already embarked on the review of the Mining Act, with the aim to attract more investment in the sector. Data acknowledged that the payment of royalties is not streamlined and should, therefore, be reviewed.
“I must say, we are not collecting as much as we should even with the big companies, we are finding it difficult to collect revenues in form of taxation,” he said. He explained that this is because government heavily relies on voluntary declarations of private companies to charge fees and royalties and as a result most mining companies under-declare revenues from mining activities and therefore payless than what they are supposed to pay.
The laws under review include: the Mining Act 2003, Mining Regulations 2004, the Mining Policy 2001 among others. The review is also likely to affect other laws such as the Land Act. Data said government has already set up an inter-ministerial committee to review the policy and the laws. The committee includes representatives from investment group, Uganda Chamber of Mines and Petroleum (UCMP), civil society organizations, among others.
The people of Karamoja also want investors to seek their consent before mining on their land. This proposal, however, might not augur well with the president. In October this year, President Yoweri Museveni, while addressing a mineral wealth conference organised by the Uganda Chamber of Mines and Petroleum, called for the amendment of the Mining Act to remove the clause on consent that land owners are supposed to furnish a prospective investor, arguing that it was deterrent to the sector.
“The mistake has been to make investors deal with land owners. They should deal with government and then the government will deal with land owners. You just tell those villagers to get out. You can’t stop the state from accessing its assets. We shall sort it out, we shall amend the act. In fact the constitutional court should say that the act is unconstitutional,” Museveni is reported to have said.
Don Bwesigye Binyina, the executive director of African Centre for Energy and Mineral Policy, proposed that government should set up a mineral audit agency to work hand in hand with URA, to monitor and audit mining companies. This will ensure that companies don’t under-declare their revenues. He argued that this will help government maximize revenues from the mining sector. Civil society organizations want disclosures of royalties to become mandatory.
Binyina gave the example of Tanzania, which, in 2009, after facing similar challenges, created the Tanzania Mineral Audit Agency and, together with the Tanzania Revenue Authority, accelerated revenue collection and enforced proper recording-keeping.
Some participants proposed penalties for under-declaration of revenues and non-payment of royalties. Others asked government to create a company, such as the national oil company, to specifically deal with minerals. Mr Data said the amendment is expected to put in place g measures to compel mining companies to rehabilitate and clean up the environment after closing the mines.
He said the amendment will also create a geosciences board to regulate professionals in geosciences. The people of Karamoja also want an effective complaints mechanism or arbitration system to deal with disputes.
Participants want the amendment to fix a timeframe in which one should hold a license without actual mining. In a case where the grace period has elapsed, the license should be withdrawn. This is expected to weed out speculators who have acquired licenses but have not done any exploration.
Data said the amendments are expected to streamline and regulate artisanal miners, who are largely unregulated and engage in harmful mining practices. Participants also want government to compel mining companies to spend more on corporate social responsibility programmes.
Source : The Observer